omniture

Emperor International Holdings & Emperor Entertainment Hotel Announce 006/2007 Interim Results

Emperor International Holdings; Emperor Entertainment Hotel Limited
2006-12-21 12:54 1173

Property Investments Strengthened

Hotel Quickly Establishes Brand-Name in Lucrative Macau Market

HONG KONG, Dec. 20 /Xinhua-PRNewswire-FirstCall/ -- Emperor

International Holdings Limited (Hong Kong Stock code: 163; ADR: EPRRY) and

Emperor Entertainment Hotel Limited (Hong Kong Stock code: 296) announced

interim results for the six months ended September 30, 2006 ("Review Period"

or "Period"):

Highlights

Emperor International Holdings Limited

-- Turnover from core operations rose 30% to HK$200 million

-- All segments recorded growth in turnover

-- Gross profit margin reached 74%

-- Profit amounted to HK$204 million

-- Interim dividend of 4 HK cents

-- To focus on residential property redevelopment projects

Emperor Entertainment Hotel Limited

-- Turnover rose 778% to HK$593 million

-- Profit rose 485% to HK$109 million

-- Mass-market table win per day up 20% to HK$28,000

-- VIP table gross win per day up 17% to HK$676,000

-- Interim dividend of 4 HK cents

-- Room for expand operations

Emperor International Holdings Limited ("the Group" or "EIH")

EIH recorded turnover of HK$200.4 million for the six months ended

September 30, 2006. This compares to HK$154.8 million from continuing

operations in 2005, when total turnover amounted to HK$496.9 million.

Profit attributable to shareholders reached HK$203.6 million (2005:

HK$446.6 million) with gross profit margin reached 74.3%.

Ms Vanessa Fan, Managing Director of the Group, said: "We are delighted

to report the encouraging results during the Review Period. Our high-

quality investment properties continued to record steady rental income and

revaluation gains. EIH reported a surge in turnover in all business

segments, while receiving a significant contribution from associate EEH."

EEH contributed to the Group HK$38.4 million, compared with HK$6.8

million in 2005.

Gross profit amounted to HK$148.9 million (2005: HK$122.4 million), with

the improved profit margin due to the disposal of non-core, loss-making

operations last year.

Earning per share amounted to 15 HK cents (2005: 40 HK cents). The

Group has proposed distributing an interim dividend of 4 HK cents.

"The improved margins show that we are on the right track," Ms Fan

said. "The disposal and discontinuation of non-core businesses has started

the Group on a series of steps to reposition itself as a property play."

Property Development and Investment

This business segment accounted for 40.7% of the Group's total turnover

for the Review Period.

The Group's property-related operations have seen income growing

steadily as the Hong Kong market continued to improve in the Review Period.

Turnover from the lease of investment properties rose 30.4% to approximately

HK$81.6 million (2005: HK$62.6 million). Amid a recovering property market

in Hong Kong, the Group reported a revaluation gain of HK$144.4 million from

investment properties and its Repulse Bay project, which is under

development (2005: HK$457.3 million). Profit from this segment reached

HK$207.9 million (2005: HK$511.2 million).

The Group maintained a high overall occupancy rate for its retail

properties, due to the prime locations of the majority of these properties --

for example, Emperor Group Centre in Wanchai and a shopping arcade on 8

Russell Street in Causeway Bay had occupancy rates of more than 95% and

100%, respectively.

In general, the Group made positive and active progress in property

development and redevelopment.

In April 2006, the Group announced the acquisition of an 88,420-square-

foot site along the Chang'an Avenue in Beijing for the construction of a

high-end luxury shopping and office complex of approximately 816,000 square

feet.

In November 2006, the Group announced it would jointly develop a

commercial and residential complex in North Point, Hong Kong, with New World

Development Company Limited ("New World"). The project, of which the Group

owns 75%, marked the debut partnership with New World after its Chairman

Dato' Dr Cheng Yu Tung bought a 4.67% stake of the Group's issued share

capital in October 2006.

Meanwhile, the Group has acquired several property sites to redevelop

them into high-quality residential projects. These sites -- on Queen's Road

West Western District (sold after Review Period), Java Road North Point,

Ying Fai Terrance and Seymour Road Mid Levels -- together provide a GFA of

more than 230,000 square feet. The sites were bought at the lower range of

average market prices, and are seen to have appreciated in value. The Group

would expect to receive a capital gain should these sites be sold in the

market.

Other development projects include a 151,000 square feet multifunctional

recreation complex at Repulse Bay Hong Kong which is scheduled to be

completed in 2008.

The Group's property portfolio in Hong Kong, Macau and Mainland China

reached approximately HK$5.3 billion.

Mr. Donald Cheung, Property Director of the Group, said: "Our recent

aggressive property development has strengthened the Group's presence in the

property market, especially in our new focus on high-yield residential

redevelopment projects.

"These projects also show our commitment to directing our resources

toward property development and investment where there are possibilities for

achieving higher margins and greater growth," Mr Cheung said.

Hotel

The Group's Emperor (Happy Valley) Hotel performed a remarkable

turnaround of its operations during the year. Turnover for the hotel

increased 12.1% to approximately HK$32.1 million (2005: HK$ 28.6 million),

with revenue mainly coming from the hotel's 150 guest rooms, karaoke lounge

and coffee shop. Profits climbed 476.0% to HK$2.9 million (2005:

HK$501,000), following the conversion of several hotel rooms into karaoke

rooms.

The hotel achieved an improved room and occupancy rate, with the rate

reaching approximately 90% on average.

Securities Brokerage and Consultancy Services

Turnover from this segment climbed 37.4% to HK$86.5 million (2005:

HK$63.0 million). Profit rose by 36.7% to HK$59.4 million (2005: HK$43.4

million). The result was boosted by the expansion of the commodities

futures business in the region and the increase in the number of initial

public offerings in Hong Kong.

As part of the Group's plan to redefine itself as a pure property

player, the Group is planning a spin-off of the securities and brokerage

operation, with a separate listing on the Hong Kong Stock Exchange.

Contribution from associate

The Group received a contribution of HK$38.4 million (2005: HK$6.8

million) from its 45%-owned associate Emperor Entertainment Hotel Limited

("EEH"). The Macau hotel commenced business in January 2006 and brings in

contributions as well as cash dividends to the Group.

Emperor Entertainment Hotel Limited ("EEH")

The Review Period is the first six-month financial period during which

EEH and its subsidiaries have operated as a full-scale entertainment and

leisure conglomerate.

Turnover soared by more than seven times to approximately HK$593.3

million during the Review Period (2005: HK$67.6 million). Profit

attributable to shareholders rose 485.2% to approximately HK$109.2 million

(2005: HK$18.7 million). The surge in turnover and profit was mainly

attributable to contributions from the Group's flagship project, Grand

Emperor Hotel in the Macau Special Administrative Region.

Macau Hotel Project

The Grand Emperor Hotel in Macau is the flagship of this segment. The

hotel officially commenced business in January 2006, and was the first new

hotel in Macau in the year, in line with the Group's strategy to get in

early in the fast growing and lucrative market. The Review Period marked

the first period to record a full six-month operation of the hotel as a full-

scale entertainment facility. The result showed positive contributions from

all segments.

The Grand Emperor Hotel is located at the heart of Macau's city centre,

a short distance from the main ferry terminal and the casino landmark Hotel

Lisboa. Targeting medium to high rollers, the Grand Emperor Hotel has

136,660 square feet of gaming space spread across seven floors. It offers

348 slot machine seats and approximately 90 gaming tables in a gaming

concourse and VIP rooms, featuring mainly baccarat -- the most popular table

game in Macau.

The Group owns 45% of the project. With management control vesting in

the Group and other stakeholders remaining passive investors, the project's

financials are consolidated into the Group's balance sheet in order to

provide transparency for the market and investors.

Since the commencement of business in January 2006, the hotel has

quickly established its brand-name in Macau, the world's second largest

gaming market. Despite keen industry competition with the arrival of several

new players in the market, the project recorded turnover of approximately

HK$532.1 million (2005: Nil), and profit reached approximately HK$210.1

million, compared with a loss of HK$10.6 million previously. The hotel

building recorded a revaluation gain of HK$123.1 million (2005: HK$20.4

million).

Gaming Revenue

Despite growing market competition, the Group's casino operations,

provided by licence holder Sociedade de Jogos de Macau ("SJM"), performed in

line with management expectations. All segments picked up quickly since the

project launched in January 2006. Management expects continual improvement

in its results when the hotel further expands its operations.

Gaming Concourse

During the Period, the Group had increased the number of tables in

operation in the mass market-targeted concourse to 48 tables from 44 tables

as reported in the latest annual report. These tables resulted in a gross

win of approximately HK$235.9 million, with an average win of approximately

HK$28,000 per table per day, up from approximately HK$23,000 as reported in

the latest annual report. Revenue for the Period was approximately HK$94.3

million.

Slots

Slot machines recorded turnover of approximately HK$58.6 million from

the operation of 348 slot seats, up from 333 seats as reported in the latest

annual report. The slot machines returned an average win of approximately

HK$900 per seat per day, compared with approximately HK$700 as reported in

the latest annual report. Income for the Period was HK$18.2 million.

VIP Room -- Self-managed

The Group managed one of the eight VIP halls within the hotel.

Supported by a decade-long operating experience in Macau, the six gaming

tables of the Group in its VIP hall, all of which offer baccarat, recorded a

rolling of approximately HK$28.9 billion and an income of approximately

HK$288.1 million. Average win per table per day was approximately

HK$676,000, compared with approximately HK$579,000 as reported in the latest

annual report.

Win percentage (calculated before discounts and commissions) was 2.6%,

compared with 2.7% as reported in the latest annual report. The win

percentage is subject to short-term fluctuation but is steady in the long

run based on historical industry averages.

VIP Room -- Rental

The Group received rental contribution from the leasing of five VIP

halls operating within the hotel. Income was HK$16.9 million during the

Review Period. The Group had leased out its sixth hall in October 2006.

Non-Gaming Revenue

The Grand Emperor Hotel recorded HK$71.7 million in non-gaming income,

compared with HK$24.7 million as reported in the latest annual report. This

comprised mainly of contributions from hotel rooms, food and beverage, as

well as rental income from sauna, night club and retail space operations on

the ground floor of the hotel.

The hotel rooms had an average daily rate of HK$700 during the Period.

The occupancy rate of the available guestrooms was 81%, compared with 64%

reported in the latest annual report.

Income from food and beverage was HK$25.9 million, and rental income

from sauna, night club and retail space operations was HK$7.3 million.

According to Macau Government Documentation and Information Centre,

there were 12,411 hotel rooms in Macau as of September 30, 2006, a 16.2%

increase from the previous year, with an average occupancy rate of

approximately 70%. Amid growing competition and increase in room supply,

the Group managed to attract and retain hotel guests with its top-class

attentive service and high-end entertainment and lodging facilities.

Golden Princess Cruise Liner

The Group received turnover of HK$61.2 million (2005: HK$67.6 million)

and profit of HK$15.2 million (2005: HK$21.4 million) from its cruise-

related operations. The cruise liner provides entertainment, gaming and

accommodation to customers.

Property Sales and Development

This segment, mainly represented its Shanghai development project,

recorded no turnover during the Period, as its investment property project

in Shanghai remains under development. The project recorded a loss of

approximately HK$1.8 million, mostly of expenses used on the property

development.

The property development project -- to be developed into a retail

development in Yu Yuan, Shanghai -- was in the investment stage during the

Period. The Group plans to build on the 22,870 square metre site a

commercial complex in a 50:50 split with a local partner with a total area

of 114,000 square metre. The Group envisages lucrative returns from the

project, in which it contributed only the land, with construction being

undertaken by its local partner and potential market risk covered by a put

option.

The Group has appointed reputable international consultants for the

Shanghai property development to handle leasing management and revise the

design of the shopping arcade, with a view to improving pedestrian flow

within the complex and thus maximizing the investment value of the project.

The project is set to become a commercial landmark in Shanghai.

Ms Vanessa Fan, Executive Director of the EEH, said: "With the opening

of the Grand Emperor Hotel in Macau in January this year, the Group is on

track to reposition itself as a full-scale entertainment platform in Macau

and Shanghai."

The Group anticipates increasing contributions from the gaming arm when

the hotel expands its operation following the increased supply of dealers

from SJM.

Ms Fan concluded: "Looking ahead, the Group will continue to look for

expansion possibilities with further utilisation of the Group's execution

strength and rich assets in the entertainment and retail industries."

About Emperor International Holdings

Emperor International Holdings Limited is an investment holding company,

which is principally engaged in property development and investment

business. Its subsidiaries are also engaged in hotel and financial and

brokerage services operations.

About Emperor Entertainment Hotel Limited

Emperor Entertainment Hotel Limited is the gaming business platform of

its parent company Emperor International Holdings Limited. The company owns

the Golden Princess, a casino cruise liner. It also has a hotel in Macau,

offering entertainment and leisure services, food and beverage as well as

retail outlets. The company has a development project for a prime shopping

arcade in Shanghai and continues to look for potential business

opportunities worldwide.

For Enquiries:

Emperor International Holdings Limited/

Emperor Entertainment Hotel Limited

Sidney Luk

Tel: +852-2835-6715

Fax: +852-2893-5327

Email: sidneyluk@emperor.com.hk

Website: www.emp163.com

www.emp296.com

Source: Emperor International Holdings; Emperor Entertainment Hotel Limited
Keywords: Food/Beverages
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